Issue

Feeling Bullish

03/01/2004

Most everywhere you look in our industry, good news abounds. When the term "cautiously optimistic" stopped popping up in every forecasting meeting, I began to breathe freely again. The overall semiconductor industry grew about 17 percent in 2003, and seems to be improving right along.

Last week we visited companies in the field to see how they were progressing. According to Schaumburg, Ill.-based Omron, this is the company's second best year ever. Then again, 2002 was the worst year for this automatic optical inspection company. China has been a big market for their growth, and that's where they have introduced new products first.

Many companies are finishing up a fiscal year, so annual reports are also better. Singapore and Milpitas, Calif.-based ST Assembly Test Services Ltd. (STATS), a provider of semiconductor test and assembly services, reported a fourth quarter net profit of $7.8 million compared to a net loss of $23.6 million over the same quarter a year ago. It's interesting to see where they feel the most bullish lately. It seems the highest growth is in the mixed signal area (84 percent of test revenues). Communications is the highest percent of net revenues (64.7 percent), with computers at 24.8 percent and consumer products representing only 10.5 percent. STATS' fourth quarter report stated that their capital expenditures would be in next-generation testers, fine-pitch wirebonders and in wafer-level packaging technology. Some of the new packaging offerings in 2003 include SiP solutions in PBGA stPBGA and LGA packages, flip chip ball grid array with buildup substrate and a heat spreader. Once again, production expands in Singapore, Taiwan and China.

Looking at Chandler, Ariz.-based Amkor, another packaging and test services provider, a bullish feeling just continues in 2004. Q4 sales reached $459 million, up 8 percent over the last quarter and 23 percent year-over-year. "Our 2003 results exceeded our initial expectations and were achieved during a year in which we realigned our operating structure, enhanced our balance sheet and strengthened our product development, sale and support organizations," says James Kim, chairman and CEO.

In his Industry Voices column on page 19 of this issue, Bruce Freyman, president of Amkor, talks about the company's growth strategy. "During the downturn, Amkor invested heavily in product development and manufacturing technology for flip chip, system-in-package solutions (SiPs), advanced chip scale packages, stacked-CSPs, camera modules and other package families. Today, these are core packaging competencies for Amkor, and are the heart of hot consumer products."

Those who focus on the future even during rough times are poised for success when it comes.